BI and Kemenkeu Agree on Debt Switching, Caution on Interest Burden

MACROECONOMY 
BI and Kemenkeu Agree on Debt Switching, Caution on Interest Burden 
BI and Kemenkeu agreed on a debt switching transaction involving IDR 173.4 tN of maturing state securities (SBN) in 2026 to ease liquidity and financing pressures. The strategy, aimed at supporting macroeconomic stability, will be executed in stages with BI held SBN. However, economists caution that the debt switch could increase the interest burden, potentially raising the overall debt cost and negatively affecting investor sentiment and bond yields. (Kontan) 

Trade Reciprocity Trap Between Indonesia and the United States (RI-US) 
Indonesia signed a trade agreement with the US, agreeing to export 1,819 products, including crude palm oil (CPO), to the US with 0% tariffs. In exchange, Indonesia committed to importing US goods worth USD 38 bn annually. However, Indonesia faces challenges in sectors like textiles, which have high tariffs, limiting its competitiveness in the US market. Additionally, Indonesia must compete with other nations such as Vietnam and Thailand. The deal is seen as part of US efforts to balance its regional influence, particularly against China. Despite the government's push to improve export sectors, concerns about the deal’s economic risks for Indonesia remain. (Kontan) 

12 Global Investment Firms Met with Prabowo in the US, Including BlackRock and Bernstein 
Prabowo Subianto, Indonesia's President, met with representatives from 12 global investment firms during his visit to the US in Feb-26. Notable firms included BlackRock, Bernstein, and others, focused on discussing investment opportunities and fostering stronger economic ties between Indonesia and global capital markets. The meetings highlighted Indonesia’s potential for sustainable growth, with particular emphasis on sectors such as infrastructure, energy, and digital transformation. The discussions are expected to boost foreign investment inflows and support Indonesia's long-term economic and development goals. (Bisnis.com) 

INDUSTRY 
Bursa Efek Indonesia (BEI) Evaluates Full Call Auction (FCA) Mechanism, Completion Expected in 2Q26 
BEI plans to evaluate the FCA mechanism, with completion targeted for 2Q26 as part of its stock trading rule review. FCA, used for stocks with low liquidity or special conditions, may see adjustments or a return to continuous trading if found more beneficial for market dynamics. This review aims to improve transparency, liquidity, and investor confidence, particularly for institutional and foreign investors, and address concerns over price discovery. The evaluation may impact small and mid-cap stocks, potentially influencing liquidity and trading behavior. Investors are advised to focus on fundamentals and risk management. (Kontan)